The organizational consequences of an insurer’s digital transformation


Digital transformation is driving improvements within insurance companies, boosting productivity, improving the customer experience, creating efficiencies throughout organizations, and enabling actionable insights using analytics and big data. But as an industry, we’ve been focusing on the technologies, rather than on digital transformation’s effect on each company’s work culture.

The digital transformation journey has an impact on the entire organization. Not only will the company need to implement new technologies in a digital transformation, but it will also have to alter its work procedures. The insurance organization workforce will need an entirely new type of skill set, as well as individuals with the right competencies to meet new and emerging technology challenges.

DXC performed a survey on the digital maturity of the European insurance industry and in our Advancing Digital Insurance report, we reveal that digital transformation has some negative consequences. Nearly half (47%) of respondents believe that they will have fewer colleagues in the next few years because of their organization’s transformation. Organizations also recognize that there’s a need for re-skilling, where current and future employees will need entirely new competencies.

Our research indicates that insurers are aware that they need individuals with new skill sets. Nearly two-thirds (66%) say they are actively seeking individuals with new competencies to join their organizations right now, while another 23 percent say they expect to be looking within the next two years. Only 11 percent indicate that they currently have the right mix of competencies in-house to support their digital agenda.

The majority of insurance organizations know they need new competencies. But exactly what kind of competencies do insurers need? How can insurers attract individuals who have the necessary skills?

Here are several steps insurers can take to address the key workforce issues in digital transformation:

1. Identify target competencies.

Before insurers look for employees, they must first identify the skills new staff should have. It’s not easy to figure out what future competencies and skills will be. The mix of required and preferred skills will vary from country to country, and from one organization to another. In general, the skills needed have to support and correspond with each company’s digital transformation goals, objectives and business model.

2. Attract the right talent.

Across industries, competition for the right talent continues to heat up. According to research, there are more than a half-million more open IT jobs in the United States than graduating computer science students. The search for the right competencies is becoming fierce. What’s more, talented individuals may not be looking at the insurance field as an option. The challenge is that insurers are now hunting for the same talent and in the same applicant pool as tech companies such as Google and IBM and other industries such as life sciences, manufacturing, retail and banking.

One key to attracting the right talent is to make the insurance product itself relevant for the younger target group, to attract both customers and talented employees. Insurance organizations (might) have an image issue, and there’s an educational gap for younger generations. As a group, Millennials don’t always understand why they need insurance. In Denmark, for instance, only 20 percent of younger individuals have homeowners’ insurance. If insurers can make their products more relevant to a younger audience, they will be more likely to attract customers and employees.

In the insurance industry, the average age of the employee pool is probably than in many other industries, so a generational shift needs to occur. Insurers need to offer benefits that are important to younger employees. While a good salary is important to these individuals, they also value benefits such as flexible work hours and having a manager who offers consistent feedback on their work. Building benefits like these into the organization’s culture isn’t easy, but it’s essential.

3. Address leadership communication challenges.

Managers must learn or hone their communications skills. We’ve discerned from our research that insurers will likely employ fewer individuals in the next several years. Not only will managers need to assimilate new competencies, but they’ll also have to reduce headcount as their organizations become more digital.

The insurers in the DXC study may have been at different stages in their quest to find employees with the right skills to meet digital transformation challenges, but they all realize they must take action immediately. Not one of the respondents indicated that the search for new talent could be delayed much longer or that they could make do with existing competencies.

Peter Hecht headshotPeter Hecht is head of marketing and communications for DXC Technology’s insurance business in North & Central Europe. He is responsible for promoting DXC as a thought leader within insurance across the region and for driving business development projects. Peter holds two master’s degrees in international marketing and management from Copenhagen Business School and CEMS (The Global Alliance in Management Education) and was named a Berlingske Business Talent 100 in 2016.

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